China’s largest sport utility vehicle vehicle manufacturer, Great Wall Motors Company Ltd, is in advanced stage negotiation with American vehicle manufacturer, General Motors Company, to acquire its second manufacturing plant based in Maharashtra.
According to sources directly aware of the development, the Chinese company has also signed a Memorandum of Understanding with the Detroit-based company and is also negotiating with the state government of Maharashtra for possible incentives to the company, if it decides to acquire the plant.
According to a report in the Economic Times on Monday, Great Wall Motors is likely to pay around $250 to $300 million to the American manufacturer for the plant.
Mint on November 10, 2019, was the first to report that Chinese vehicle manufacturers, Great Wall Motors and SAIC Motor Corp are in talks with the American vehicle manufacturer for a possible acquisition of its second plant.
Located in Talegaon, in Maharashtra, the plant can produce 165,000 vehicles a year and 160,000 power trains. General Motors had in 2017 sold its first factory in India, at Halol, in Gujarat to SAIC. MG Motor India, a unit of SAIC, has tasted runaway success with its debut Hector sport utility vehicle (SUV) since it went on sale in June.
Great Wall Motor is actively scouting for land or existing factories in India to start operations. The brown field factory, if acquired, is likely to help the company launch its operations in a shorter span company to a green field one.
Great Wall is likely to launch its Haval brand of sport utility vehicles in India and will showcase them in the upcoming Auto Expo in February.
General Motors stopped selling vehicles in India in early 2017, using the Talegaon plant to export its Chevrolet Beat hatchback primarily to Latin America. It could not completely shut its India operations as it failed to find a buyer for the second plant.